In this fourth annual Lodging Tax Study, HVS Convention, Sports, and Entertainment Consulting surveys lodging tax rates and revenues across the United States. This study includes a broad range of cities and tracks policy trends in lodging tax imposition. This research identified the lodging tax rates levied at the state, county, city, and special district levels. We provide data on the collection and distribution of revenue from lodging taxes levied in all 50 States and the 150 largest cities in the United States.
Lodging Tax Imposition
Lodging taxes are typically ad valorem taxes (levied as a percentage of value). Short-term overnight stays at hotels, motels, bed-and-breakfasts and other lodging accommodations. States authorize the imposition of lodging taxes, except in home rule cities. States may tax lodging as a part of general sales and use tax, a specific lodging tax, or both. For most lodging taxes, state legislation defines the tax base, determines who is exempt from the lodging tax, and establishes collection procedures. States and municipal governments may distribute lodging tax revenues to their general funds, special revenue funds, or to local governments and special districts. Certain state and local governments also impose excise taxes on lodging, at a fixed amount per unit, such as $1.00 per night for the furnishing of a hotel room.
In certain cities, state and municipal governments have formed special districts to levy additional on lodging taxes on hotels located within a defined geographic subset of the city. Different districts within a city may have varying rates of lodging taxes. For example, Sacramento charges a higher special district rate of 3% for hotels in Downtown Sacramento (“Zone 1”) and lowers the rate as hotels get further from the downtown area. Revenues from special district assessments frequently support the development of convention centers that generate room revenue for the hotel properties located in the district.
From a political perspective, lodging taxes may be easier to impose than other taxes because visitors that use lodging accommodations are not constituents. Typically, hotel operators collect the tax from guests and receive a small administrative fee of one or two percent of collections.
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